United Rentals cancels tender offers for 6½%, 7¾%, 7% notes

By Angela McDaniels

Tacoma, Wash., Dec. 24 - United Rentals, Inc. terminated the tender offers and consent solicitations for United Rentals (North America), Inc.'s $1 billion of 6½% senior notes due 2012, $525 million of 7¾% senior subordinated notes due 2013 and $375 million of 7% senior subordinated notes due 2014, according to a company news release.

Tendered notes will be returned, and the proposed amendments to the note indentures will not become operative.

The offers were being held in connection with the planned merger of the company with and into RAM Acquisition Corp., an affiliate of Cerberus Capital Management, LP. United Rentals said on Monday that it terminated the merger agreement with RAM.

On Nov. 14, Cerberus announced it was not prepared to move forward with the acquisition. United Rentals then filed suit against Cerberus and its affiliates, seeking to compel them to complete the acquisition as planned. On Friday, a Delaware court ruled that United Rentals could not force Cerberus to complete the takeover.

The tender offers began on Oct. 16 and ended at midnight ET on Friday. The consent deadline was Oct. 29.

As of Dec. 7, the company had received tenders and consents for $999.14 million, or 99.91%, of the 6½% notes, for $517.99 million, or 98.67%, of the 7¾% notes and for $371.86 million, or 99.16%, of the 7% notes.

The payout for each $1,000 principal amount of notes was set at $1,037.30 for the 6½% notes, $1,074.25 for the 7¾% notes and $1,071.93 for the 7% notes. Noteholders would have also received accrued interest up to but excluding the settlement date, and the payouts included a consent fee of $30.00 for each note tendered by the consent deadline.

The consents would have allowed United Rentals (North America) to eliminate substantially all of the restrictive covenants and some events of default in the note indentures.

The closing of the tender offers was subject to the consummation of the merger, the company securing up to $2.5 billion of new credit facilities, the receipt of up to $4 billion of additional debt financing and the receipt of consents from holders of a majority of each series of notes.

Credit Suisse Securities (USA) LLC (212 325-4951), Banc of America Securities LLC (888 292-0070 or 704 388-9217), Morgan Stanley & Co. Inc. (800 624-1808 or 212 761-1864) and Lehman Brothers Inc. (800 438-3242 or 212 528-7581) were the dealer managers and solicitation agents. D.F. King & Co., Inc. (800 488-8095 or 212 269-5550) was the information agent.

United Rentals is an equipment rental company based in Greenwich, Conn.

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